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We know how incredibly easy it is to rack up credit card debt.
More than 40% of American households carry a credit card balance, with an average balance of more than $6,000, according to a study from the financial data website ValuePenguin. The ongoing pandemic has made it even harder for Americans to avoid going into credit card debt , with 20% increasing their overall debt since the start of the pandemic.
But here’s the tricky thing about credit cards: They only benefit you when you’re building credit and receiving perks — but not when you’re paying interest. If you’re paying a lot of interest on your balances, credit card companies are making money off of you.
Your cards are using you, not the other way around.
With average APRs (annual percentage rates) on new credit cards north of 18%, according to WalletHub, paying them off is a smart move. You can do it. And it’ll be worth it.
5 Ways to Eliminate Credit Card Debt
Before you start your journey to becoming debt free, try to stop using your credit cards altogether until you can use them without putting yourself in financial risk. Though the specifics will vary based on your situation, we only recommend using credit cards if:
- You don’t have any debt outside of a mortgage or student loans. (Mortgages and student loan debt are almost impossible to avoid nowadays.)
- You have an emergency fund with three to six months of expenses saved. This is how much money you’d need to survive during that time period, assuming you have no income reaching your bank account.
- You can pay off your credit card debt in full every month — not just minimum payments.
However you do it, make paying off your credit cards — and learning to use them responsibly — a high priority.
First, determine how much credit card debt you have. You can do this using a tool like Credit Sesamea free credit monitoring service.
Credit Sesame will also show you how to raise your…
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